Intel antitrust case may be headed to New York court

New York state said it is unable to proceed with its claim for damages in a Delaware court after some recent adverse orders

A federal judge in Delaware has cancelled a Feb. 14 trial of an antitrust case filed against Intel in 2009, after plaintiff New York state asked the court to allow its transfer to a New York state court.

The Dec 23 order by District Judge Leonard P. Stark follows a letter on Dec. 22 by New York state attorney general Eric T. Schneiderman to the judge stating that New York is no longer able to proceed in the court with its claim for damages under its state's laws.

Judge Stark had on Dec. 7 granted Intel's motion that some of the claims of New York state fell outside the statute of limitations, which is three years in antitrust cases in Delaware as compared to up to six years in New York state. The judge also disallowed a treble damages claim by New York on behalf of consumers under New York's Donnelly Act. Intel had contended that the Donnelly Act does not authorize New York to bring a damages claim for harm done to private parties.

"Given the combination of the conservative methodology employed by New York's expert to calculate damages and Your Honor's recent decision on statute of limitations, New York is no longer able to proceed before Your Honor with its claim for damages under its state's laws," Schneiderman said in his letter.

New York proposed that it dismiss its federal law claims thereby divesting the court of original jurisdiction. Thereafter, the court should dismiss the state law claims without prejudice. New York may then file in New York state court to seek whatever remedies are available to it there, Schneiderman said.

In a complaint of Nov. 4, 2009 New York state had charged Intel with a systematic worldwide campaign of "illegal, exclusionary conduct" to maintain its monopoly power and prices in the market for x86 processors, the "brains" in PCs.

By exacting exclusive or near-exclusive agreements from large computer makers in exchange for payments totaling billions of dollars, and threatening retaliation against any company that did not heed its wishes, Intel "robbed its competitors" of the opportunity to challenge its dominance in key segments of the market, New York state said in its complaint.

Intel reached a settlement with the U.S. Federal Trade Commission in 2010, and agreed to pay US$1.25 billion in a settlement with competitor Advanced Micro Devices in 2009. It was also fined €1.06 billion (US$1.4 billion) by the European Commission for antitrust practices in 2009, which it appealed.

These developments were on conduct that was the same at issue before the court, and none resulted in any compensation to New York victims, Schneiderman said in his letter.

The attorney general said the state of New York would instead pursue damages in New York state court to address what it holds is Intel's "egregious and illegal conduct."

Intel declined to comment, but according to Schneiderman's filing, the company is said to have declined to consent to the proposal to shift the case to New York.

Judge Stark has stayed the case in Delaware while the parties submit to the court before Dec. 30 a schedule for arguments on whether the case should be dismissed.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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